U.S. Senators Urge EU to Expedite Probe

A group of 59 U.S. senators sent a letter to the European Commission (EC) on Nov. 24 urging the European antitrust regulators to hurry their investigation into Oracle's acquisition of Sun, citing the latter's "precarious" financial condition and fears about more layoffs at the struggling computing company, reported AP Technology Writer Jordan Robertson.

Sen. John Kerry, D-Mass., the lead author of Tuesday's letter, said a further delay in the review "threatens thousands of American jobs, so we felt compelled to ask for a speedy resolution.

"Sun Microsystems' financial position has become more precarious and the commission's inquiry has continued," the letter read. "Some have raised concerns over the company's ability to continue to employ its thousands of workers. Accordingly, we respectfully request the European Commission complete its investigation of this transaction as quickly as possible."

Oracle CEO Larry Ellison has stated that Sun is losing about $100 million a month with this delay from the European regulators, and "the longer this takes, the more money Sun is going to lose. ... We'd like to get this done." He has also stressed that Oracle wants "to save as many jobs as we can" in regards to the merger.

On Nov. 20, the European Union regulators extended the deadline for their final decision on Oracle's plans to buy Sun from Jan. 19 set back in Sept. to Jan. 27. This extension was set in place to satisfy a request made by Oracle, which is building its rebuttal to the EC's Statement of Objections issued on Nov. 9 opposing Sun's acquisition by Oracle. The EC is the European Union's executive and regulatory branch.

It was in April that Oracle officially announced it planned to acquire Sun for about US$7.4 billion in cash, or $9.50 per share. The Department of Justice began its process of performing due diligence regarding antitrust issues, and on June 26 extended the time it needed to research the proposed acquisition.

On July 16, Sun stockholders voted to approve the company's acquisition by Oracle. Shareholders holding about 62 percent of Sun's stock voted in favor of the deal during a special meeting at Sun's offices in Santa Clara, Calif.

The U.S. Department of Justice approved the deal with no restrictions on Aug. 20. The following month, the EC decided it needed to take an in-depth look at the proposed buy-out. On Nov. 9, the EC issued a Statement of Objections opposing the proposition, with spokesman Jonathan Todd clarifying that Oracle is the leading proprietary database vendor and MySQL is the leading open source vendor "and a particularly important force in the market now ... Despite MySQL being open source, Oracle would be the exclusive holder of copyright on the MySQL code, making it hard for competitors to do what they want with it."

Oracle responded by way of a statement, which began by defining the company's main objective in obtaining Sun: "Oracle's acquisition of Sun is essential for competition in the high end server market, for revitalizing Sparc and Solaris and for strengthening the Java development platform. The transaction does not threaten to reduce competition in the slightest, including in the database market.

"The database market is intensely competitive with at least eight strong players, including IBM, Microsoft, Sybase and three distinct open source vendors," the statement reads. "Oracle and MySQL are very different database products. There is no basis in European law for objecting to a merger of two among eight firms selling differentiated products. Mergers like this occur regularly and have not been prohibited by United States or European regulators in decades."

More Information

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